You may have already been put off sourcing products from China after hearing second hand horror stories from people who have been a victim to a scam. Unfortunately, scams are not unheard of, and when it comes to international money transfers, the risk always increases. However, if scams were as common as some believe, it would make no sense for anyone to source from China.
Other outcomes besides purely having your money taken without receiving a product also include having your intellectual property stolen. This may be your product designs being taken and created by Chinese firms, or even as far as pure imitations being made to pass off as a legit product from your own brand.
This article will take a look at how trustworthy Chinese suppliers actually are, and what you should look out for to reduce your risk of falling victim to a scam or from being exploited.
In terms of pure scams, the most frequent is a buyer pays a supplier for a batch of goods that they never receive. As soon as the money has been transferred, communications cease. This scam can affect companies looking to place a significant order, to small private resellers who are purchasing a much smaller quantity.
Alternatively, another common issue companies run into is receiving goods not up to the expected quality. Even if the supplier has provided a sample for you to review prior to making an order you can still receive below par goods.
Another aspect to carefully consider prior to making an order, particularly if you are designed and patented the product you are paying to be produced, is the risk of your designs being stolen. For many, this is the driving factor to why they refuse to look towards China for manufacturing. Generally, this only affects larger companies with a unique design, as smaller importers are generally buying ODM type goods (products already designed).
There are also various other types of fraud that can be encountered when ordering from China, and while we will not touch directly on them in this article, all the advice provided will be useful for avoiding becoming a victim.